Most Traders Are Ready to Weather the Recession Storm, Bullish on Crypto

According to the latest Charles Schwab Trader Sentiment Survey, 9 in 10 traders in the U.S. believe that the economic recession is between “somewhat to highly likely”, with 74 anticipating it already this year. 

The outlook is especially bearish for the current quarter, with 59% confirming their negative sentiment and 18% designating the recession as their primary concern. Inflation is likewise dubbed the top worry around money and investing for traders (21%).

Despite these feelings, most traders believe that they will be able to weather the storm. 79% of the respondents think that inflation will ease by the end of 2023 (79%) while 69% believe that the anticipated recession will last up to one year. Just one in five has decided to use their investment funds to hedge against a prolonged down market or recession.  

40% of the traders plan to add more funds to their portfolio, with most emphasizing that they are taking the same or slightly less risk in Q3 (59%). 69% of the traders who believe that a significant correction is awaiting the market are positive that they will be able to endure the ramifications. Meanwhile, 50% believe that this is the time to invest. 

64% of traders overall are confident in their decision-making.

Recession fears surpassed domestic and geopolitical worries in the third quarter amid ongoing concerns about inflation.

said Barry Metzger, Head of Trading and Education at Charles Schwab.

Already though, we saw a strong finish for the markets in July. There is some optimism in traders’ outlook when it comes to the duration of a potential economic downturn, which most expect to be short-lived. And many traders are not taking specific action to hedge against a recession as they feel confident in their decision-making.

He added that it is a positive sign that traders across generations feel prepared to take on market-related challenges.

Most of the respondents think that now is the time to invest in Tech (39%) and Finance (27%) due to lower prices, with traders (50%) especially bullish on value stocks as well as meme stocks (63%) and cryptocurrencies (63%). That said, few traders plan to buy cryptocurrencies. Those who want to are 

crypto investors with experience. 

Recently, CEO of Whiterock Andy Long, CEO of WhiteRock said that the crypto winter could provide excellent opportunities for mergers and acquisitions deals, adding that bearish dynamics in the cryptocurrency market would allow the expansion of those companies that will demonstrate that they can adapt to extreme conditions.